MILPITAS, Calif. – November 8, 2018 – SEMI, the global industry association serving the electronics manufacturing supply chain, today voiced support and encouragement for trade discussions between U.S. President Donald Trump and People's Republic of China President Xi Jinping during the G20 Summit in Argentina on November 30 and December 1. Representing the semiconductor industry end-to-end, from chip design through manufacturing, SEMI urged both leaders to reach a constructive deal and offered trade principles beneficial to the global microelectronics manufacturing supply chain.

“SEMI members are key enablers of the more than $2 trillion electronics manufacturing supply chain, providing more than 350,000 jobs in the United State alone,” said Ajit Manocha, SEMI president and CEO. “Our global business benefits from free and fair trade, open markets, and support for international laws governing IP, cybersecurity and national security. I urge the leaders of China and United States to come to the negotiating table and agree on a framework that can resolve the current trade frictions which negatively impact our industry.”

Recent trade tensions, together with expected export controls, burden the global electronics manufacturing supply chain and have forced many SEMI member companies to pause or rethink their investment strategies. Over the past six months, SEMI has testified that tariffs threaten to undercut the ability of many SEMI members to sell overseas by increasing costs, stifling innovation, and endangering U.S. technological leadership.

SEMI continues to educate policymakers about the critical importance of free and fair trade, open markets, and respect and enforcement of IP for all players in the global electronics manufacturing supply chain. As part of this initiative, SEMI is outlining “10 Principles for the Global Semiconductor Supply Chain in Modern Trade Agreements” and encouraging their adoption as our leaders negotiate a new trade relationship between the U.S. and China.

These core principles outline the primary considerations for balanced trade rules that benefit SEMI members around the world, strengthen innovation and perpetuate the societal benefits of affordable microelectronics – essential components in all advanced communications, computing, transportation, healthcare and consumer electronics.

10 Principles for the Global Semiconductor Supply Chain in Modern Trade Agreements

1. Affirm principles of non-discrimination. Non-discriminatory treatment is a central tenet of the global trading system. SEMI strongly believes that any trade deal should provide that all products from a party to the deal cannot be put at a competitive disadvantage in any other party’s market. Related, any agreement must be fully compliant with the World Trade Organization’s rules.

3. Remove tariffs and end technical barriers on semiconductor products. Parties should eliminate tariffs and technical barriers on semiconductors and all technology products that rely on electronic chips. Removing tariffs and technical barriers is crucial for businesses, especially for small and medium-sized enterprises, in penetrating new markets. Related, any trade deal should open markets for services providers, ensuring that all face fair and transparent treatment.

4. Simplify and harmonize the customs and trade facilitation processes. Trade deals should include strong commitments on customs procedures and trade facilitation to ensure that border processing will be quick, transparent, and predictable. The parties should also work to use electronic customs forms to expedite customs processing.

5. Combat any attempts of forced technology transfer. All trade deals should have clear and firm rules that prohibit countries from requiring companies to transfer their technology, intellectual property, or other proprietary information to persons in their respective territories.

6. Enable the free flow of cross-border data. In today’s global economy, all industries, including the semiconductor industry, rely on the free flow of data. Countries should refrain from putting in place unjustifiable regulations that limit the free flow of information, which curb innovation and slow growth. SEMI supports provisions that enable the movement of data, subject to reasonable safeguards for privacy and other protections.

7. Eliminate forced data localization measures. Many countries have created laws that require physical infrastructure and data centers in every country they seek to serve, which adds unnecessary costs and burdens. Forward-looking policies should eliminate the use of forced data localization measures.

8. Harmonize global standards to achieve “one standard, one test, accepted everywhere.” Businesses should not have to face different standards for each market they serve. Global standards, driven by industry, should be market-oriented, and there should be strong commitments on transparency, stakeholder participation and coordination.

9. Create transparent rules for state-owned and -supported enterprises to ensure fair and non-discriminatory treatment. SEMI supports a trade deal that contains robust commitments to ensure that state-owned and -supported enterprises compete based on performance, quality and price, as opposed to discriminatory regulation, opaque subsidies, favoritism, or other tools that artificially benefit state-backed businesses.

10. Establish protections for companies and individuals that respect privacy while also balancing security. Any trade deal should have firm consumer protections, including privacy, that enables ease of use, but also does not forgo security. SEMI supports efforts to use encryption products in support of this venture and also believes that parties should work to advance efforts on cybersecurity through self-assessment, declaration of conformity, increased cooperation and information sharing, all of which will help prevent cyberattacks and stop the diffusion of malware.

About SEMI

SEMI® connects over 2,000 member companies and 1.3 million professionals worldwide to advance the technology and business of electronics manufacturing. SEMI members are responsible for the innovations in materials, design, equipment, software, devices, and services that enable smarter, faster, more powerful, and more affordable electronic products. FlexTech, the Fab Owners Alliance (FOA), the MEMS & Sensors Industry Group (MSIG), and Electronic Systems Design Alliance (ESDA), are SEMI Strategic Association Partners, defined communities within SEMI focused on specific technologies. Since 1970, SEMI has built connections that have helped its members prosper, create new markets, and address common industry challenges together. SEMI maintains offices in Bangalore, Berlin, Brussels, Grenoble, Hsinchu, Seoul, Shanghai, Silicon Valley (Milpitas, Calif.), Singapore, Tokyo, and Washington, D.C. For more information, visit www.semi.org and follow SEMI on LinkedIn and Twitter.